How much money was spent by electoral candidates in 2008?

In the ongoing back and forth that Stephen and Michael are having in the comments section in response to one of Stephen’s earlier posts, Michael comments that he would be more convinced that spending plays a limited role in elections if politicians “started acting as if money for campaigning didn’t matter”.

As a result I’ve been wondering how much electorate candidates spent in the 2008 election.  If candidates believed that spending would have a significant influence on the outcome of that election, they would presumably have spent as close to the $20,000 cap as possible.

I’ve compiled a table (which is included at the bottom of this post) of the spending by the two highest polling candidates in the closest electorate races in the 2008 election (using the figures from the Electoral Commission’s website).  I selected all those electorates which were decided by less than 2,000 votes (15 electorates) on the basis that if money matters, presumably it matters more in close races. The table shows the amount spent by each candidate and that figure as a percentage of the $20,000 spending cap.

Obviously, a range of factors impact on how much a candidate spends in an election (not least how much the candidate can raise).  The table also has obvious limitations, so I include it only because I think it is interesting to note that in a number of these races candidates could (assuming they could raise more money) have spent more. The average amount spent by the candidates in the table below was $14,660.07 (or 73.30% of the maximum). Did candidates refrain from spending more because they didn’t think it was worthwhile or did they face fiscal constraints?

Finally, when I was compiling the table I noticed that spending in the Maori electorate seats seemed generally quite low.  On average the Maori Party candidates spent $11,935.87 per seat and the Labour Party candidates $10,052.71 per seat (I haven’t had a chance to work out the average for the other seats yet). Interestingly, the Cabinet Paper records that the Maori Party were in favour of increasing spending limits for constituency candidates in electorates in excess of 20,000 square kms (see para 43).  The Cabinet Paper doesn’t say how much the Maori Party wanted to increase the limit by.  I wonder what the thinking behind the Maori Party submission was? Perhaps they are hoping to have more funds to spend at the next election?

 

Update: Jono has just informed me that Nikki Kaye actually raised over $20,000, but according to the table above went on to spend just under $12,000.  Pretty remarkable if advertising is an important influence on voter preference. Equally a bit of a problem for my view that advertising is the best of a bad bunch in terms of convincing voters. – Steve

The Ectopic Nature of Electoral Finance Law

Professor John Prebble has a theory that the incomprehensibility of tax law is caused by the misalignment between “natural law” and “the laws of men and women.”  There exists, he argues, an ectopia (or dislocation) between the economic concept of income and the legal concept of income that essentially cannot be solved.  This ectopia is the result of physical facts such as geography (e.g. where someone is resident) and time (e.g. income is earned on an annual basis) that the law is unable to treat neutrally.

I believe that the same thesis applies to electoral finance law.  It is a law of nature that people will try to convince others of their beliefs.  Trying to convince others will always have a cost - sometimes it will cost money, sometimes it will cost time – but it will always cost.   However, the laws that we design to try to deal with speech are necessarily contrived.  Electoral finance laws have to target particular kinds of speech (it cannot regulate what I say to my neighbour), and have to target a particular type of expense (typically money, not time).  That’s all you need for the entire system to start to represent a nonsense.

As an example, consider the initial Government position to cap expenditure of political parties, but not parallel campaigners.  The obvious flaw – as pointed out by Metiria Turei – is that parties will merely use parallel campaigns to advertise beyond the legislated limits.  In order to maintain the effect of limits on political party expenditure, they have to prohibit parallel campaigners from supporting a party.  The implication of this is an increase in the amount of negative campaigning by parallel campaigns.  Negative campaigning is not per se problematic, but when it arises by virtue of a distortion in the advertising market, then we are decreasing human welfare. 

Starting down the road of electoral finance law leads inexorably to arbitrary decisions you wish you did not have to make.  No matter how many times you compile an Issues Paper, seek comments on a Proposal Paper, or send potential laws to a Select Committee, there is no real way to avoid the ectopia of electoral finance law.

Whenever the debate over electoral finance laws becomes circular, I am reminded of a quotation from Marla Daniels to Cedric in The Wire:  “You cannot lose if you do not play.”

The Mischief Rule

With the release of Power’s Cabinet Paper on Electoral Finance Reform, many commentators are beginning to weigh in on the implications of lifting spending limits on third parties.  Given that some of the coverage has been negative, the Minister is now saying he’s willing to consider imposing spending limits on third parties, if that is what is required to achieve “broad support” (i.e., agreement from political parties).

It’s important to return to basics and ask the question: what is the mischief or defect that the law is trying to prevent through spending limits?

There is simply no firm evidence that an absence of spending limits illegitimates an election.  The United States and Australia do not have spending limits, and yet the integrity of their elections cannot seriously be called into question.

Part of the reason why high levels of electoral spending does not impugn the outcome of an election is because there is very little evidence that spending influences voting patterns. The fact is that if a politician is highly succesful at soliciting votes, he is highly likely to be succesful at soliciting donations (the same is true of a third party – if third parties are effective at securing votes for their favoured platform, then they are more likely to receive money from the supporters of that platform).  Hence, correlation between spending and electoral outcome proves little.

What you need to do is adjust for confounding factors.  When such adjustments are made, there is very little evidence that spending is a major causal factor in how people vote.  One such study found that “campaign spending has an extremely small impact on election outcomes.”  In fact, some studies have even found that incumbent wealth can harm a political cause.

It seems then that prima facie there is no concrete harm that can be demonstrated from a liberal approach to campaign finance.  But, let us assume that higher levels of spending did in fact cause people to support a particular party of platform.  Would this be a bad thing? Some people may choose to vote for a party because of a charismatic leader, because they are bigots, or any other number of questionable reasons.  It is odd to say that someone should not change their mind on the basis of advertising paid for by people who think their cause justifies such sums of money.

Even if the people who change their vote are doing so in response to the volume rather than the content of the advertising, and such voters have real influence, then there is little that limits on spending will do to cure such shallow voters.  As Robin Hanson argues:

Many folks mistakenly assume that distortions from shallow voters stop if [third parties] are silenced.  But not only would that hinder non-shallow voters from getting info from [third parties], the total distortion by shallow voters is not obviously reduced!  Shallow voters who believe whatever side shows the most ads would either be bought by [third parties]  more indirectly, or by other deep pockets more directly.  And the many other kinds of shallow voters, who believe whoever has the funniest ads, or the coolest spokesfolks, or the prettiest candidates, would still cause distortions.